How to create a compelling compliance process in your business?

by News

 

In this article, we’re  going to cover the summary of what you need to have an effective compliance program. You can read more about the five pillars Get the whitepaper: Setting Up a Robust and Automated Risk & Compliance Management Program.

 

Once you’ve understood these five pillars of your compliance program, your fundamentals, your customer identification, your due diligence, your monitoring, and your audit and reporting, you’ll figure out how to put them together.

 

How do you integrate the fundamentals of compliance?

All you need to do is integrate the fundamentals of risk acceptance and risk management configuration and tuning, a robust customer identification process, a standardized and comprehensive customer due diligence and risk assessment process, a continual customer monitoring process, and a structured and automated event capturing regulatory reporting and audit review process into a secure and automated digital platform. 

 

You can make your customers happier, boost your bottom line by at least 250K a year, and never face a compliance fine.

 

You also need continual improvement. Regulatory changes will occur, new requirements will come about, and new capabilities will be available. You need to deploy those, and you need to conduct your operations.

 

There's a better way than trying to put this together ad hoc

If you suspect there’s a better way than trying to put this together ad hoc, there is. You’re not alone. We focus on managing inherent risk and improving control effectiveness, and it is possible for asset managers, alternative investment funds, and transfer agents to massively improve their investor experience, avoid compliance fines, and boost their bottom line significantly.

 

Most people fail or struggle because their business does not take a holistic approach to compliance, and the teams are overwhelmed with complicated assessments and audits that involve lots of manual checking and double-checking. Also stuck with manual processes, they lack integration, and they’re overloaded with documents and different evaluation tools that rely heavily on emails, checklists, spot reviews, Excel, and integrating a diverse set of disparate tools to conclude. 

 

Are we a good fit? KYC3 is for alternative finance looking to digitize their entire compliance process, but they’re struggling with the complexity and technical challenges of integrating everything within a reasonable time and budget.

We are focused on the specificities of alternative investment, private equity, wealth management, and virtual asset service providers.

 



What happens if you work with KYC3?

You will identify your clients quickly and securely. Your clients will be able to securely upload their data directly to you.

 

You will be able to see the status of your dossiers in real time with no surprises. You will manage complex risks and compliance without worry. You can easily evaluate client-provided documentation with confidence.

 

You can see exactly where the risks are in your portfolio of counterparties. You will be able to meet your reporting requirements on time. You will be able to manage complex and dynamic KYB structures and you will get instant risk assessment updates when structures change or merge.

 

You will be able to always get the latest UBO and control charts for each dossier in your system, and get documented records of your compliance activities including customer consent, for example, for GDPR and FATCA CRS. You will analyze risk with complete and reliable records.

 

You will respond to regulators and auditors quickly and accurately. You will enjoy the benefits of a fully digital process. You will no longer rely on checklists, emails, and files scattered across folders.

 

And you will finally get rid of tedious manual remediation audits and report preparation. You can forget about audit surprises and lost documents and you can feel confident, empowered, and have a clear overview of everything under your responsibility. You will never again face an audit or regulatory review with uncertainty or doubt and you will never again be fined for non-compliance due to disorganized information or opaque processes.

 

So if you’d like to learn more, head over to KYC3 where you can find a wealth of resources, more videos, and more documents. Check out our social media and book a call with us.

We’d love to have a conversation and see if we could help you out, see if we’re a good fit, and give you a price. Book a call with us

 

What is the first step in your compliance process?

by News

To establish a successful counterparty risk management program, it is essential to focus on the five key pillars: Fundamentals, Counterparty Identification, Counterparty Due Diligence, Counterparty Monitoring, and Compliance Risk Reporting. 

By clearly defining these steps, organizations can effectively manage costs and achieve scalability through automation, resulting in transparent processes and a robust audit trail. 

In this article we are going to talk about the fundamentals, the first pillar of your compliance program. If you want to read about the other four key pillars, Get the Whitepaper: Setting Up a Robust and Automated Risk & Compliance Management Program

 

 

How do you define your risk appetite?

 

You have a risk appetite statement. This is a board-approved statement that delimits the nature, quality, and levels of risk that the business expects to manage. 

This is based on what you anticipate your risk management capacity to be and what you anticipate the risks to be within your business.

 

 

This is critical and the cornerstone of your compliance program. You have your policies. You will have AML policies, sanctions policies, bribery and corruption policies, and all the other policies necessary to establish a baseline of roles and responsibilities, scopes, service levels, and standards and expectations within your compliance program.

 

You have your procedures, your detailed procedures that ensure a standardized, objective, reliable and measurable approach to your anti-money laundering compliance program. 

And the most important, you have your people and your technology. They will determine the capabilities that you can bring to bear.

 

How to set yourself up for success? Recruit the best talent you can find. Give them the best tools for the job.

If you look at your risk appetite statement, the old way of doing this is to review the business capabilities and expected market. 

 

You estimate the risks and define an RAS, which is put forward to the board and approved. 

The new way of doing this is to define your RAS based on an empirical review of clients and products using automated capabilities and real-time processing that you can get from a system like KYC3.

 

Automate and fully digitalize your risk assessment system

Why should you develop an RAS that is based on measurable parameters from your clients, products, and markets? By using an automated and fully digital risk assessment system, you can validate the accuracy and adherence to your risk appetite

 

Step two, defining your compliance process.

The old way of doing this was to develop procedures and checklists that enable the RAS to be implemented in your organization. This would result in an operating manual detailing a system of elaborate procedures, and checklists, usually managed with tools such as Excel, Word, and email. 

 

The new way of doing this is to configure your compliance process based on the limits of a dynamic and integrated digital system to digitize the entire process.

The digitalization delivers a standardized compliance process that is leaner, more agile, and much more efficient. 

When we use automated and fully digital risk assessment systems, we can do more with less and we can adapt to regulatory changes quickly and inexpensively 

 

Step three, ensuring that your risk assessment process is reliable.

The old way of doing this is to review the risk assessments to ensure that they are consistent and the risks are properly accounted for. This would result in the manual review of tests and testing of real cases to determine if the risk assessment process was correctly categorizing and assessing the risk. 

 

The new way of doing this is to configure the risk assessment engine directly in the system and begin using it. Dynamically adjust the parameters so that the risk results filter into the correct risk levels automatically and risks are updated in real-time. 

 

The new result means that once tuned, there’s no need to review the risk assessment process as a standardized digital process is delivering provably consistent results. 

By using an automated and fully digital risk assessment system, you get a standardized, automated, and fully auditable risk assessment process.

 

If you’d like to learn more, check out our social media and book a call with us. 

We’d love to have a conversation and see if we could help you out, see if we’re a good fit and give you a price.

 

What Are The 5 Pillars Of A Robust Compliance Program 

by News

It is possible to automate compliance that’s easy to use, but building the tools is technically very challenging and requires specific skills. KYC3 is the only team dedicated to solving this for AIFM, private equity, transfer agents, and wealth management. We’ve got more than 15 years of experience in the regtech space, and 30 years of experience in technology overall.

 

Jed Grant, the founder of KYC3 has been developing software since the 1990s, and he knows how to build systems that just work. 

So let’s get down to it. In this article, we want to run through the five major functions of your compliance program, and then we’ll share with you detailed articles on each of these pillars,coming soon.

So let's talk about the first one, getting the fundamentals right.

 

So when you work on your compliance program, you really need to understand your Risk Tolerance. You need to get your risk acceptance, get your processes, and make sure that they are well governed and reliable.

The second pillar is your Customer Identification Program.

You need a strong way to identify the entities that you interact with, and that means both individuals and corporate entities, all the way back to the UBOs and controlling individuals of those corporate entities. So you need to have the procedures, tools, and policies in place to ensure that you’re identifying your customers reliably, correctly, and with accurate determination of who they really are and who they represent.

 

 

The third pillar of your compliance program is your Customer Due Diligence.

You need to review the documentation, you need to conduct due diligence checks, you need to understand the risks, and you need to remediate those risks. 

This means that the information provided by your customers needs to be corroborated by third parties.

 

The counterparties you interact with should have proof of existence, they should be documented, and you should be able to find that they are legitimate business entities and individuals acting in the manner and for the purpose that they disclose to you. 

The fourth pillar of your compliance program is your Customer Monitoring,

and this is the ongoing monitoring of all the counterparties that you interact with, and understanding the risks involved there. 

You need to control for PEP and sanction involvement, you need to understand adverse media, and you need to understand the dossiers and reassess periodically the risk that they represent.

This means you need a deep understanding of not only your counterparties, but the products, the channels, and the geographies in which you operate with those customers. 

 

This is very important on an ongoing basis, and it means daily. 

And the fifth pillar of your compliance program is your Audit and Reporting.

You need to have reliable, accurate, and consistent reporting. 

You need data to drive your decisions, you need data to provide to your auditors, you need accurate records of who decided what, when, and who accepted which risk at what time, and you need all of these decisions well documented, well chronicled, and auditable. 

You need to be able to easily provide this information to your internal auditor, your external auditor, and your regulator.

 

If you can get all five of those fundamentals correct through your whole compliance program, you will have an efficient and effective program that will run cost-effectively in the background without causing friction for your customers, and without costing an arm and a leg. 

 

So if you’d like to learn more, book a call with us. We’d love to have a conversation and see if we could help you out, see if we’re a good fit, and give you a price.

Top 3 Most Stressful Aspects of a Regulatory Site Visit

by Blog

Unexpected site visits from regulators can be extremely stressful. The ever-changing regulations and laws add to the workload and the need to stay prepared for surprise inspections while maintaining standards.

 

Since 2008, regulators have imposed more rules and laws, and with the introduction of new regulations like GDPR and DORA, we can expect even more changes ahead.

 

Each year, the costs of complying with new regulations increase by 10%, making it increasingly challenging to keep up using traditional, non-digitized methods.

 

In 2018, the Competitive Enterprise Institute released a comprehensive report on the rising compliance costs for large companies.

 

Here are the top three most stressful aspects of a regulatory site visit and how to address them:

 

1. Not Having Your Audit Reports Ready

   Keep your audit reports up-to-date and easily accessible. Regularly review and organise your reports to avoid last-minute rushes during a site visit.

 

2. Having to Print Loads of Documents

   Reduce the need for printing by maintaining comprehensive digital records. A robust document management system enables quick retrieval and sharing of documents with regulators.

 

3. Discovering Gaps in Your Audit Records

   Conduct regular internal audits to identify and fix any gaps in your records before a regulatory inspection. This proactive approach helps maintain compliance and reduces the stress of unexpected findings.

 

The New and Improved Way of Automating Reports with KYC3’s Solutions

 

Integrated System with Full Audit Trails

KYC3’s solutions keep all data in a single integrated system, complete with full audit trails and detailed statistics. Reports are available in real-time, ensuring you’re always prepared.

 

Generate Reports within Minutes

With KYC3, reports can be generated in minutes rather than hours, thanks to standardised formats and consistent data directly from the system. Data is accessible via API, allowing automatic integration with complex business intelligence and decision support systems.

 

Streamlined Compliance with a Digital Platform

Using an integrated digital compliance platform, 360-degree view reports are standardised and available at all times. This saves man-days of work annually and ensures consistent and unbiased reporting.

 

Efficient Auditor Review

Auditors can review configuration rules, results, and audit logs directly on the system, providing a transparent view of how the system was used. This allows for quick empirical observations and immediate addressing of deficiencies, with auditor sign-off for configuration changes achieved swiftly.

 

Comprehensive and Accessible Records

Analysts can produce detailed records, including documents, assessments, and audit notes for regulators in standard formats at the push of a button. This holistic, transparent, and simplified compliance process ensures that fines for deficiencies or errors are avoided.

 

By leveraging KYC3’s solutions, the compliance process becomes more efficient, reducing stress and ensuring your organisation is always ready for regulatory site visits.

Streamlining the Onboarding Process with KYC3

by Blog

Streamlining the Onboarding Process with KYC3: Efficiency and Accuracy

Onboarding counterparties can be one of the most time-consuming activities for companies. From gathering documents via email to dealing with incomplete dossiers and performing manual checks, the entire process demands significant time and attention. KYC3 has revolutionised this process by fully digitising it, providing companies with a portal where counterparties can upload documents and undergo all necessary checks, thereby reducing the risk of errors or missing information.

Benefits of Using an Automated Onboarding Portal

  1. Clear Communication of Document Requirements

– The portal ensures that document requirements are clearly communicated to counterparties, eliminating confusion and reducing delays.

  1. Automated “To-Do” List

   – The digital counterparty identity portal includes an automated “To-Do” list, making it easier for counterparties to upload all necessary documents. This feature speeds up the process and ensures that all required information is provided, reducing the risk of errors.

  1. Enhanced Efficiency and Security

   – With the streamlined process, counterparties experience improved efficiency and security, leading to greater satisfaction and increased business opportunities.

  1. Simplified Compliance Management

   – The compliance manager receives updates about the onboarding status and findings, without needing to manage the entire process manually.

Key Features of the KYC3 Onboarding Portal

Digital Dossier Management

– Centralised and organised document management for easy access and review.

Real-Time Video Onboarding

  – Allows for immediate and interactive onboarding sessions.

AI-Powered ID Analysis

  – Advanced technology for accurate identity verification.

Automated Risk Screening Engine

  – Efficiently identifies and mitigates potential risks.

Secure and Customizable

  – Options for on-premise or hosted solutions to meet specific security and customization needs.

Compliance with Regulations

  – Fully compliant with AMLD5, GDPR, BSA, and PSD2, ensuring adherence to international standards.

No more back-and-forth emails, calls, or unreliable tools for risk management. The KYC3 onboarding portal offers a streamlined, efficient, and secure solution that benefits both companies and their counterparties. By automating the onboarding process, companies can focus on growing their business and building stronger relationships with their partners.